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Pearl E. Cohen, On Behalf of Herself and All v. Chicago Title Insurance Company

March 7, 2013

PEARL E. COHEN, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED
v.
CHICAGO TITLE INSURANCE COMPANY



The opinion of the court was delivered by: Juan R. Sanchez, J.

MEMORANDUM

Plaintiff Pearl E. Cohen brings this suit on behalf of herself and similarly situated class members against Chicago Title Insurance Company (Chicago) alleging Chicago overcharged her and the other class members for title insurance they obtained in refinancing their mortgages. At the parties' request, this case was placed in suspense pending the Pennsylvania Supreme Court's review of White v. Conestoga Title Insurance Co., 982 A.2d 997 (Pa. Super. Ct. 2009). Following the issuance of the decision, the case was removed from suspense. Chicago filed a renewed motion to decertify the class. Cohen filed a motion for partial summary judgment. For the following reasons, this Court will grant Chicago's motion to decertify the class and deny Cohen's motion for partial summary judgment.

FACTS*fn1

Chicago is a title insurance provider. Title insurance guarantees the purchaser of a parcel of property owns the property free and clear of all liens and encumbrances except as specifically disclosed in the title insurance policy. All title insurers providing such insurance in Pennsylvania, including Chicago, are governed by the Pennsylvania Title Insurance Companies Act, 40 Pa. Stat. Ann. § 910-1 et seq., which regulates title insurers and the rates they may charge for title insurance policies. The statute requires title insurers to either (1) file their own individual proposed rate with the Insurance Commissioner, id. § 910-37(a); or (2) elect to become a member of a rating organization that files proposed rates on behalf of all members of the organization, id. § 910-37(b).

Chicago issues two kinds of title insurance policies, owner's policies and lender's policies. When a consumer buys real property in Pennsylvania, the consumer typically purchases an owner's title insurance policy. The lender's policy insures the lender/mortgagee and protects the lender's security interest in the property. It usually provides coverage in the amount equal to the secured loan. Chicago is a member of the Title Insurance Rating Bureau of Pennsylvania (TIRBOP). TIRBOP submits its proposed rates to the Insurance Commissioner for approval. The approved rates and regulations governing how the rates are applied are set forth in the Manual of Title Insurance Rating (Rate Manual). The Rate Manual contains the rates that TIRBOP members must be charged, and it is unlawful not to charge customers such rates.

There are three different rate tiers: (1) the basic rate, (2) the reissue rate, which is 90% of the basic rate, and (3) the refinance rate, which is 80% of the reissue rate.*fn2 The basic rate is the default rate charged to consumers. The reissue and refinance rates are discounted rates given to a purchaser when only a few years have passed since the issuance of a title insurance policy.

In 2002, Cohen and her husband decided to refinance their home.They had previously obtained three loans secured by mortgages on their property located at 130 West Pomona Street, Philadelphia: (1) a loan from the Department of Housing and Urban Development in the amount of $8,900, recorded on September 10, 1969; (2) a loan from Class Exteriors in the amount of $18,868, recorded on November 14, 1997; and (3) a loan from Capstone Mortgage Corporation in the amount of $44,175, recorded on March 19, 1999.

As a part of the refinancing, Cohen's lender requested that she purchase a lender's title insurance policy. Cohen sought title insurance from Chicago through its agent, Chelsea Land Transfer, Inc. (Chelsea), which provided the closing and settlement services to Cohen. Maria Rozniakowski, an employee of Chelsea, handled Cohen's transaction. Chelsea issued a lender's title insurer policy on behalf of Chicago to Cohen with a face value of $57,600. At closing, Cohen signed the settlement sheet, known as the HUD-1. Line 1108 of Cohen's HUD-1 stated Chicago charged Cohen $606.75, the basic rate, for the lender's policy. Cohen argues she was overcharged because she had bought title insurance within the previous three years and was thus entitled to the refinance rate.

On January 27, 2006, Cohen filed a suit in the Philadelphia Court of Common Pleas against Chicago asserting the following causes of action: (1) money had and received; (2) "unjust enrichment/account/disgorgement/restitution"; and (3) violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL). On February 28, 2006, Chicago removed the case to this Court. On December 4, 2006, Cohen filed a motion for class certification. On April 9, 2007, this Court issued a Memorandum and Order certifying the following class:

All persons or entities in the Commonwealth of Pennsylvania who within 10 years of having previously purchased title insurance in connection with their mortgages or fee interests, refinanced the identical mortgage or fee interest, and were charged a title insurance premium by Chicago Title that did not include the applicable premium discount for title insurance on file with the Pennsylvania Insurance Commissioner.

Order filed April 9, 2007, ECF No. 38. On February 2, 2009, this Court denied Chicago's motion to decertify the class as to the UTPCPL claim without prejudice to its reassertion prior to trial. ECF No. 78.

On July 15, 2010, following an oral argument, this Court granted the parties' joint motion to stay the case pending the Pennsylvania Supreme Court's review of White v. Conestoga Title Insurance Company, 982 A.2d 997 (Pa. Super. Ct. 2009). The case was thereafter placed in suspense. The Supreme Court issued its decision in White in August 2012. After the case was removed from suspense, Chicago filed a renewed motion to decertify the class. Cohen filed a motion for partial summary judgment as to liability. Cohen's only remaining claim is her claim pursuant to the "catch-all" provision of the UTPCPL, 73 Pa. Stat. Ann. §§ 201-9.2, 201-2(4)(xxi).*fn3

DISCUSSION

A.Chicago's Motion to Decertify ...


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